Nike to Outfit University of Michigan Sports Teams – Wall Street Journal

Nike Inc.
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will take over the rights to outfit the University of Michigan sports teams next year, unseating Adidas AG
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from one of its most prized American sports contracts.

Nike and Michigan agreed to a deal in principle that would begin with the 2016-17 season and run through at least 2027, with an option to extend until 2031, according to a statement from Michigan. Terms of the deal weren’t immediately available but are expected to be announced next week, the statement said.

Nike had been the Michigan Wolverines’ athletic gear supplier for more than a decade until Adidas took over the contract in 2008. Its return to Ann Arbor coincides with the hiring of Jim Harbaugh, the former San Francisco 49ers coach and star Michigan quarterback, as head coach of Michigan’s football team, a key part of rebuilding efforts for the school’s storied football program.

“After careful consideration, the right partner for the University of Michigan was Nike,” Jim Hackett, Michigan’s interim director of athletics, said in a statement.

The Big Ten school had been a crown jewel of Germany-based Adidas’s U.S. sports deals, particularly as the company unveiled a five-year plan this spring that emphasized renewed marketing focus on American sports.

Adidas was notified late Monday that the school had opted not to renew its contract with the company, according to Adidas North America President Mark King.

“Obviously we’re very disappointed that Michigan didn’t choose us, but we can probably sign four or five really wonderful schools as we go forward,” Mr. King said. Losing the Michigan contract would free up at least $5 million a year in Adidas’s marketing budget, he said.

Nike has been increasingly aggressive in going after contracts held or coveted by Adidas and Under Armour Inc.
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The Beaverton, Ore., company in June signed an eight-year deal, to outfit the NBA beginning with the 2017-18 season. That deal is valued at more than $1 billion, according to a person familiar with the matter. Adidas declined to renew its contract with the league, saying it wasn’t as profitable as expected. Nike last year re-signed former NBA MVP Kevin Durant to a contract worth a potential $350 million over 20 years, after a fierce bidding war with Under Armour.

Last year, Notre Dame ended a long-term relationship with Adidas in favor of a 10-year deal with Under Armour.

Write to Sara Germano at sara.germano@wsj.com